Discriminatory policies against non-Bermudians, taxes on international businesses and stifling Governmental control are likely to suffocate international business, forcing them into the hands of Bermuda's eager competitors.

At an Earth Day panel held at Number One Shed on Saturday, former Bank of Bermuda president Mr. Donald Lines hit out at Government for imposing taxes on business in an "objectionable and arbitrary manner''.

With tourism in "dire straits'' and the closure of the Bases, Government has put the onus on the only healthy limb of the economy -- international business -- to make up the shortfall.

Recent tax proposals combined with discriminatory practices, Mr. Lines warned, could effectively stultify international business growth in Bermuda.

In his speech: `Charting A New Course: Sustainable Living in Bermuda', Mr.

Lines warned Government against forcing businesses to adhere to the Island's social and environmental standards to the detriment of competitiveness.

Instead, he warned, Bermuda could end up like China, where state owned enterprises, forced to provide employment guarantees, education and hospitalisation for employees, produced inferior goods at inflated prices.

"We too could end up in a position like this if we believe we can completely manage and plan economic, social and environmental goals of the community without regard to the effect on our competitive position,'' Mr. Lines warned.

Furthermore, environmental and planning issues were likely to fall by the wayside if business in Bermuda floundered.

Medical and charitable care standards would also plunge if business went elsewhere, he claimed.

"While social and environmental issues are very important to us as individuals, we must also recognise our ability to enhance and protect this aspect of our Island home is only sustainable in a sound economic environment,'' he said.

This was especially so, when "a growing list of discriminatory practices, wrong thinking and policies, acceptable in the 70s and 80s but not in the 90s'', were added to tax cost.

As a result, businesses could turn to more attractive jurisdictions where the felt a greater sense of acceptance, Mr. Lines warned.

Current discriminatory practices, he said, included: Limitations on ownership of buildings occupied by international businesses; Limitations on ownership of property occupied by non-Bermudian executives and staff; Discriminatory taxes on purchase and sale of property owned by non-Bermudians.

Instead, Bermudians should become "more realistic'' by encouraging non-Bermudians to locate to the Island, broadening its pool of expertise and expanding the economy.

Lines: Stop suffocating international business Only with an expanded overseas work force would Bermuda successfully develop the Airport and land vacated by the Bases, he claimed.

Mr. Lines also chided Bermudians for their lack of understanding of the role played by international business at every level of life.

He said it was particularly puzzling in light of the numbers of Bermudians employed in international business and the amount of information available on the subject.

While some 12,000 people were directly or indirectly employed by international business this compared with just 9,500 in tourism related work.

He pointed to the decline of the tourism industry as an example of an industry that is no longer competitive.

The hotel industry's five million dollar profit last year, he said, was "nothing to cheer about'' when the cost of replacing the Island's six major hotels would cost in excess of $400 million.

Cruise ships, he said, were multi-million floating hotels that offered inclusive prices impossible for local hotels to match.

"Tourist business is on the decline because we are no long competitive. Our prices are too high, because the costs including government taxes are too high.'' He added the expectations of those working in the industry were well above the ability of the industry to provide hotel prices compared with other similar or better resorts.

"Most of the present generation of Bermudians have been pampered. This will make our acceptance of change in our employment outlook more difficult,'' he said.

"We have had an unbelievable period of growth and improvement in our general standard of living ... it doesn't take a rocket scientist to see the improvement in our life styles is not just limited to a few Bermudians -- it has been experienced by all of us.

"To remain competitive we must recognise that we are now exposed to unlimited competition from abroad and that foreign competition dictates the amount we can charge for our services and expect to be paid by any business -- as well as the amount Government can reasonable extract to pay for services the public demands or wishes Government to provide.'' Looking forward to the year 2000, Mr. Lines predicted dramatic changes in the way business will be conducted worldwide.

Although Bermuda has banned franchises with one exception, it is predicted over 80 percent of all retailing business by the year 2000 will be a form of franchising with a network of small service organisations linked to corporate giants, he said.

And improved communications will mean a greater choice of location for businesses which will increasingly move to the least expensive jurisdictions.